Coca-Cola EP teams up with conglomerate for $1.8bn takeover
- The anchor bottler has signed a letter of intent with Aboitiz Equity Ventures
- AEV is a self-styled ‘techglomerate’ operating across a vast range of sectors
- Coca-Cola EP would hold a 60% share of the firm upon the deal’s completion
Coca-Cola Europacific Partners has struck an agreement to jointly acquire a soft drinks bottler in the Philippines for $1.8billion (£1.4billion).
The anchor bottler has signed a letter of intent with the conglomerate Aboitiz Equity Ventures (AEV) to buy Coca-Cola Beverages Philippines (CCBPI).
The deal builds on Coca-Cola EP’s expansion across Australia, Indonesia and the Pacific two years ago, when its predecessor business bought Coca-Cola Amatil, thereby becoming the world’s biggest independent Coca-Cola bottler.
Acquisition deal: Coca-Cola Europacific Partners has signed a letter of intent with the conglomerate Aboitiz Equity Ventures (AEV) to buy Coca-Cola Beverages Philippines
Last year, CCBPI accounted for 43 per cent of the non-alcoholic ready-to-drink market and almost 70 per cent of sparkling drinks demand in the Philippines.
Should its takeover go ahead, Coca-Cola EP said the purchase would have a ‘modest impact’ on its debts and delay the expected achievement of a leverage target from the end of 2023 to the following financial year.
The Uxbridge-headquartered group would hold a 60 per cent share of the firm and have the power to appoint three of its five board members, including the chief executive.
The remaining 40 per cent will be controlled by Manila-based AEV, a self-styled ‘techglomerate’ operating across a vast range of sectors, including infrastructure, power, artificial intelligence, food and financial services.
Damian Gammell, chief executive of Coca-Cola EP, said the tie-up ‘offers us a great opportunity to acquire an established, well-run business with attractive profitability and growth prospects’.
Coca-Cola EP also released its half-year results on Wednesday, revealing sales expanded by 8.5 per cent to almost €9billion thanks to price increases and healthy underlying demand across developed markets.
UK trade was further boosted by the record hot weather in June, and volume growth from Coca-Cola Zero Sugar and Monster energy drinks.
Production at the group’s Wakefield site in West Yorkshire was at serious risk of being shut down towards the end of the period after workers voted for industrial action amid a pay dispute.
But strikes were called off in mid-June when bosses agreed to salary hikes of up to 18 per cent.
Following the performance, the company has enhanced its annual guidance, with comparable operating profit now set to rise by 12 to 13 per cent, around double the previous forecast of 6 to 7 per cent.
Gammell added: ‘We remain confident in the resilience of our categories, despite the ongoing dynamic outlook.
‘We have fantastic activation plans to build on our momentum, including the Women’s World Cup, to engage customers and consumers. We also continue to actively manage our pricing and promotional spend to remain affordable and relevant to our consumers.’
Coca-Cola Europacific Partners shares were 1.6 per cent higher at €58.4 on early Wednesday afternoon and have risen by approximately 13 per cent so far this year.